annual report - Kendrion

Staff costs and other operating
expenses
Staff costs, including costs for temporary
employees, amounted to EUR 72.8 million
compared to EUR 62 million in 2010,
an increase of EUR 10.8 million (17%).
Staff costs in relation to revenue and added
value have evolved as follows:
2011 2010
In relation to
revenue 27.2% 27.9%
In relation to
added value 54.3% 54.2%
Staff costs were negatively influenced in
2011 by severance payments and a special
100 th anniversary bonus to all employees,
so leverage on staff costs, given the
continued growth, is better than stated in
the above table.
The growth in indirect staff was particularly
evident in the Commercial Vehicle Systems
business unit, with an increase of 18 FTE,
largely due to the Indian start-up.
Other operating expenses for 2011 were
affected by the provision made for the
EC fine and acquisition expenses. Adjusted
for these items, other operating expenses
increased by EUR 2.2 million (11%) from
EUR 19.5 million to EUR 21.7 million. The
increase was partly due to higher revenue,
with variable costs like packaging,
transport, energy and repair and
maintenance all rising. Furthermore,
IT expenses relating to the ERP roll-out had
an increasing effect, as did the ‘100 years of
electromagnetism’ celebrations in 2011.
Adjusted other operating expenses
expressed in terms of added value
decreased from 17.0% to 16.1% in 2011.
Net financing costs
Net financing costs amounted to
EUR 2.o million, including unfavourable
exchange rate differences of
EUR 0.2 million. EUR 1.8 million interest
expenses also included the bank guarantee
fee relating to the EC fine, commitment fees
on unused facilities, amortised bank and
legal fees (transaction costs), interest on
pension obligations and a number of
smaller items. Average (gross) bank debt
levels in 2011 amounted to EUR 13 million,
excluding (unpooled) cash positions.
Average interest charged was 3.3%.
Income tax
The effective income tax rate for 2011,
– 48.9%, is detrimentally influenced by the
EC fine including interest, which is not tax
deductable. The normalised tax situation
is as follows:
Tax paid in 2011 amounted to
EUR 4.1 million, lower than the total tax
charge of EUR 6.7 million, due to offsetting
the tax loss carried forward in Germany and
the Netherlands against the profit before
tax recorded in 2011. Tax paid in 2011 was
negatively influenced by a delayed payment
from 2010 in Germany of EUR 0.8 million.
Average staff costs per FTE increased in
2011 to EUR 48,000 (2.2%), partly due to
the severance payments and the 100 th
anniversary bonus referred to above.
The number of employees (in FTE)
increased by 11% in 2011 as compared to
2010. The increase can be shown as follows:
Kendrion is heavily focused on increasing
the company’s flexibility, monitored on the
basis of quarterly measurements of
changes in staff expenses and operating
expenses, classified as fixed, variable and
semi-variable costs.
2011 2010 % growth
Direct staff 680 610 11.5%
Indirect staff 651 608 7.1%
Temporary employees 152 158 (3.8)%
Normalised profit before tax 27.2
Income tax 6.7 (24.6%)
Normalised net profit 20.5
The normalised effective tax rate in 2010
was 25%.
For further information on the effective tax
rate, refer to page 122 of the financial
statements.
42
annual report 2011